In December, Supervisor and Metro Board Member Zev Yaroslavsky submitted a motion to the Metro Board to eliminate the $3 account maintenance fee for ExpressLanes customers. The fee has yet to go into effect — it won’t until the ExpressLanes open on the 10 freeway — and will only apply to those who use the ExpressLanes three or fewer times each month.

Nonetheless, I know the fee has been controversial among some Source readers. For those interested in the issue, I encourage them to read the staff report, which includes an explanation of why the fee was created and the impact of getting rid of it, as well as a look at how other agencies handle similar fees.

The Metro Board approved the fee as part of their overall approval of the ExpressLanes project and the Board will make the decision on whether to get rid of it. I’m guessing that one factor that will be considered is how much of a deterrent the fee has been for those considering signing up for a FasTrak transponder to use the ExpressLanes.

I’m interested in reading comments from those out there who read the staff report.

1. As soon as this fee is waived, I will go out and open an account. It’s the ONLY thing holding me back.

2. Something is wrong with the entire setup of the system when there would be NO net toll revenue for the 110 without the fee. Revenue should come from the tolls of people who use it, not fees on people who don’t. (NO net revenue would actually be ok if the ONLY point was to ease congestion, but the second goal is to reinvest money into the corridor.)

I believe that the nickel and diming account maintenance fees are just another excuse to try to squeeze additional dollars like how Bank of America once tried to do with people’s checking accounts.

When Bank of America tried to pull off this stunt, people just shut their accounts and moved to Chase. In the end, Bank of America rescinded that it was a bad idea since they were losing customers instead of making any revenues.

It’s the same thing with this. The report may say yadda-yadda oh we need the account maintenance fee to justify operational costs blah-blah-blah, but in the end, this fee just puts off people in buying transponders to begin with and not even using the FasTrak. The end result is that we just spent millions in dollars in installing FasTrak that only few people use and it becomes yet another drain on our taxes.

The report confirms what the primary complaint is: A major reason for FasTrak is to generate revenue, not reduce traffic; and the monthly fee is there to discourage infrequent users, or at least offset the cost of them wanting to occasionally use the carpool lane without incurring a fine.

There is nothing wrong with a toll road. It’s a tax levied on those who use the service that the tax pays for. There is something wrong with calling a toll road a carpool lane and then actively discouraging and penalizing those who carpool, but who don’t carpool often enough to be worthy of using the lane without paying…a toll.

I recommend that Metro either call the lane a toll road with discounts available to those who carpool (illegal?), or make those who want to use the lane solo pay for the cost and profit of doing so, including the cost of keeping it a carpool lane (maintenance fee for the transponders).

The fact that other agencies have maintenance fees and LACMTA runs the risk of becoming a clearing house for other agencies is a concern. I would think the solution is in being able to charge a fee to other agencies for processing their FasTrak payments (lobbying Sacramento to change state law). Other agencies can then add a premium for the out of network usage or drop their monthly fees too so that it is a level playing field.

Finally, I’ll add that gaining public support for FasTrak is crucial beyond the short term profit motive. Without public support, getting FasTrak on the other freeways, including the infamous 405, will be that much harder. And FasTrak on all of LA’s parking lots, I mean freeways, should be the long term profit motive.

I’m also interested why all these reports are done in house by Metro instead of using independent analysts who are experts at these things?

If it’s all done in house, of course Metro’s not going to say anything that’s going to look bad on them, they’ll try to find ways justify their rationale because it’s their own report and they can come up with any BS to make it sound good.

It’s like Bank of America using Bank of America’s own report to to explain why it justifies them to charge maintenance fees for checking accounts. Do you think anyone will believe Bank of America will have credibility for showing an in-house report? Of course not.

I am big supporter Metro and public transit in general. I voted yes on Measure R and J and actually told everyone I know to vote yes. I think Metro just doesn’t get why people are so upset…Infrequent carpool users like myself, out-of-towners, and many other carpools would be forced into general purpose lanes unless they agree to $3/month fee for eternity.

The purpose of the project is supposed to increase the number of users and capacity not just make money. Hopefully Metro will remember that as they make decisions. Metro might actually be able to entice more users by getting significantly more people to have the transponders and decided to pay the toll when they aren’t carpooling just because the have the transponder. The “try it and get someone hooked on it approach”.

LISTEN Metro: Get rid of this ridiculous fee!! Increase the toll or utilize money from Prop C or whatever you claim you need to do to make-up for what you paint as the “massive” account maintenance fees. The $3 dollars every month, for an eternity, does exactly what again?….Keeps people’s info in a database? Maybe Metro should look at cutting costs there.

BTW: Are any of the examples cited in the report taking existing carpool lanes away from people and imposing an account maintenance fee? That column seems to have been left off the chart.

The calculations behind Table 3 in the report seem pretty dubious. According to this table, Metro stands to lose $6.9 million per month by waiving the monthly fee because 30% of transponder owners from other agencies in Orange County and San Diego would switch to a Metro transponder to save on their monthly fee. Since 30% of other agencies’ users are inactive, this table assumes that EVERY ONE of those users would switch to Metro. In fact, I would guess that only a handful of users would make this switch – I doubt almost anyone in San Diego knows that they can use Los Angeles’ transponders. Perhaps Metro could provide some evidence: to date, how many of OCTA’s inactive users have switched to a Metro transponder because LA’s fee is $4 less than the OC?

Wouldn’t the loss of the $3 fee from inactive users be the biggest driver of lost income? 69,231 users * 30% inactive * $36/year = about $750,000 lost income – much lower than $6.9 million. I don’t see that figure anywhere in this report.

There is one recommendation that is not listed in the report…keep the maintenance fee but remove the conditions that non toll paying customers need to have a transponder (ie carpoolers are not required to have a transponder). That is a win-win for customers and Metro (and yes, I understand enforcement will be harder for the police officers). This is also how SANDAG handles this issue. In fact last week I personally had to sit in traffic on the 110 during rush hour even though I had 3 people in my car (this was extremely frustrating to me) while when I was in San Diego I used the I-15 lanes as a carpooler without a transponder.

I for one have changed from an opponent of the fee because I was and infrequent carpool user, primarily to take my mother to church on Sundays. The fee was a charge on carpooling. After I got the transponder and starting using the Expesslanes I find it almost impossible to sit in stalled traffic when for only a $3.50 toll I can save time and frustration and arrive home just that much more relaxed. When I thought I would be paying the maintenance fee I am now factoring in the cost of using the Expresslanes as a reasonable cost of making a living, like parking fees and gasoline. I am changing my route pattern to have the option of using the Expresslanes on the 110.

Often times we hear the politicians on Metro Board asking Metro to explain why this is so and so instead of turning over the analysis to a third party.

Metro then types up a report that explains why they do that, and since they’re the writers, they usually type something to their favor. And what you end up with is reports like these so as to try to gain the acceptance of the Board to agree with their plan. Where’s the input from the people who actually use the system? No where.

All the decision making is done by Metro and the local politicians on the board. What we need is an independent third-party who can analyze and report these things from a neutral perspective.

I have a problem with the way the math was done for the calculations, not that it’s inherently wrong, but it’s not made clear in the report.

They justify the current fee based on cost per month for support, divided by the number of accounts that currently exist (that does make sense). They don’t discuss the cost of support based on the larger number of accounts. No where in the report does it say that the cost of support increases evenly based on the number of increased accounts (ie if you have 33% more accounts, the support costs increase by 33%).

Also, the numbers provided also don’t take into account the people who wouldn’t be paying the fee regardless (due to using the transponder sufficiently), as Metro incurs those costs anyways (especially if those users don’t pay for using the lanes due to carpooling).

To top that all off, they discuss the cost per transponder based on one number of current accounts, and then later use a different number of current accounts.

This report contains way too many flaws for me to be able to make any conclusions.

Also don’t forget that it’s a $3 account maintenance fee for eternity but there’s also nothing stopping them to raise the maintenance fees when they feel like it if they have more budget problems down the road.

Who knows what they might do if they get this message across to the politicians. They could increase the account maintenance fees to $5 or $10 per month, or even set the minimum usage requirement bar higher to 10 maybe 20 times so as to make everyone pay up.

I think Matthew B makes an excellent point about how the cost of support doesn’t/shouldn’t increase linearly with the number of accounts. If the accounts are mostly inactive, then the processing cost should be close to zero. They are just numbers in a database somewhere. I think Metro staff may want to explore the reasons why customer support costs so much as opposed to assuming that it will always be $3 per account for eternity.

I also think that most logical people wouldn’t shell out $40 for a transponder when they know they will NEVER drive the lanes. Everyone who does make the initial investment is a potential customer. Unless you’re a vanpool operator, no one actually ever drives carpool 100% of the time. They might carpool on most days but will have that option available to them when they drive solo.

The cannibalization of accounts is a persuasive point. Perhaps an agreement can be reached with existing toll facilities, or an additional fee charged to non-Los Angeles county residents who live far away from the corridor.

Account maintenance is just bits of data. You can fit thousands, if not millions of users and their data in a single 4 GB USB flash drive.

Processing that information is just a database. Any SQL based database is more than enough get this done. Anyone with basic HTML and Java script coding experience can build a proprietary system to keep this running.

Anyone who has done online banking can access FasTrak information by themselves online without calling some customer service schmo staring at scripted prompts.

So what is the justification that it costs $3 for everyone? Absolutely nothing. All it is another way to tax people to cover their budget problems.

Sure there’s a cost to keep servers running, but so does every other company out there. Banks keep servers running to have 24 hour access to online banking, but that doesn’t mean they do not pass along account maintenance fees to people.

Metro needs to learn that there is a limit to what they can pass along to people. There is a cost to doing business and as a service provider they need to find ways to cut their expenses down and learn how to balance a budget.

These facilities were built as Carpool lanes;
well actually no, the I-10 Carpool lanes were built using transit funds to be the El Monte Busway, which it still legally is, but has, through political meddling, has become the 2+/3+ facility it is today. And it isn’t open as an “ExpressLane” yet so let’s look at the I-110 Carpool Lanes.

The I-110 Carpool Lanes were built as Carpool Lanes with public funds, and until a few weeks ago, were open to anyone who met the requirement of having enough people in their vehicle, which in the case of I-110, is 2 or more people.

But now, the facility requires a transponder to enter, regardless of how many people are in the vehicle. This transponder costs $40 to obtain (discounts are available) and $3 per month to keep. Yes, if you use the transponder 4 times a month, the fee is waived, but you have to get the transponder in the first place and have it with you in the vehicle you are using that day when you want to enter the lanes, which you used to be able to enter just by having two persons in the vehicle.

This requirement allows the more accurate collection of usage data, and in theory allows the driver to indicate how many passengers are in the vehicle, possibly lessening the requirement of law enforcement and/or cameras to actually look into the vehicle to determine how many passengers are in the vehicle.

Let’s look at other similar facilities in the State of California to see what their policies are:

San Diego’s Metropolitan Planning Organization (MPO) is SANDAG, and they have built “ExpressLanes” on Interstate 15 from just north of SR52 to Escondido. It’s a very similar facility because it includes the building of a series of Park & Rides and a promise of Express Buses running along the corridor all day long. But it allows the vehicle with 2 or more people to ride free with no transponder required (see point 9) here:

A future facility will open on SR237 in San Jose. Again, like the others, there will be no requirement to use a transponder if one is in a 2+ person-occupied vehicle.

The TCA facilities in Orange County (all the Toll Roads there except the toll lane facility on SR91) do not have HOV lanes and do not offer discounts for vehicles carrying more than one person.

The SR91 Express Lanes are a special case. They do offer a discount for vehicles that use the lanes if you are in a vehicle with 3 or more people. But this is a lane that was built with private funds, and has a fixed system tolls based on the time of the day, unlike the I-110 facilitiy which varies with demand.http://www.91expresslanes.com/schedules.asp

Yes, the OCTA has purchased the SR91 Express Lanes from the private entrepreneur, but the lanes still charge a toll at certain times to HOVs and remember, SR91 did not have Carpool Lanes prior to the addition of the toll facility:
Page 192 at https://wiki.umd.edu/lei/images/8/81/CaliforniaSR91.pdf

So the board has to decide, is it worth getting all that extra data about the use of the I-110 ExpressLanes by requiring that everyone have a transponder (for which they will have to pay a maintenance fee) or does Metro start behaving like the other MPOs in the State of California (except for OCTA ‘s SR91) and not require transponders for those with 2+ (or 3+ in the future case of I-10) persons in their vehicle.

I find the report has some disingenuous (or possibly incomplete) elements. However, there are a few precious nuts of truth that we can crack open and digest. Hopefully, staff and the board will look to the tangible issues hinted at in this report to tackle the real reform that the Southland needs.

First, Table 2 states that the cost of a user account is divided into two different categories, depreciation of the transponders (18 cents per month) and Customer Service Center Support (at a whopping 282 cents per month). The table declares that all accounts cost the same to support. While this may be the case with the depreciation of the capital, I have a hard time believing that an infrequent user has the same customer service needs as a frequent user. People having lots of interactions with FasTrak have more opportunities for generating a problem that requires contact with the customer support center, while infrequent users will not. Bay Area commuters traversing bridges daily have more customer service needs than Valley dwellers that go into the City every few months. It goes to follow that their customer service needs are less. You could also tie fees directly to customer service interactions. For example, Bank of America will give you a free checking account without direct deposit if you never talk to a teller for deposit or withdrawals (ie: online or ATM interactions only). Perhaps waive the fee if users use the website to set up accounts, pay fines, and change debit cards, while charge $3 to the account if you need to talk to a person. If your service contract is based on total customers instead of actual use, then consider re-negotiating your contract.

Secondly, the staff report in Table 1 states that the Bay Area can get away without charging fees because they have two million customers and they charge carpoolers. Regarding the latter, it should be noted that the Bay Area only recently started charging carpoolers, operating for years without minimum fees and had an extensive free carpool culture (see casual carpooling). Conversely, the report fails to note that there are toll agencies in the Southland that charge carpoolers but still have minimum fees (such as the Toll Roads). In regards to the former, the Bay Area has 2 million transponders across 4 tolling agencies while the Southland has less than 2 million transponders across 4 tolling agencies. However, the four bay area tolling agencies all let the Bay Area Toll Authority deal with the FasTrak business, while each of your tolling authorities tries to make your own shop for your own commuters. I repeat: The I-680 Express Lanes, the Bay Area Bridges, the Golden Gate Bridge, and SFO Parking are ALL DIFFERENT AGENCIES but somehow came together to have a unified system across the 9 County Bay Area to give them the “economies of scale” this report says Metro needs to waive the fee. Another reason the Bay has more transponders despite the fact it has a third of the people (7 million to 20 million) is because they don’t have monthly fees. You’ll find FasTrak in cars from Sacramento to Fresno because people go to the Bay every few months and who doesn’t mind saving time? The barrier to entry is dramatically reduced when you don’t have to worry about having to use it all the time. People are holding back because of this fee.

From this incomplete report, I would recommend that the Board direct staff to approach all Southland Tolling Agencies and try to form a Joint Powers Authority to manage account maintenance that would give you the economies of scale necessary to do away with the fees. This authority would also distribute transponders that could be used on ALL FasTrak facilities. For example, you need a special transponder to carpool on the 110 while you need a Mylar bag to carpool in San Diego. The transportation system is supposed to unite the state in seamless travel and having different technologies and different accounts and different authorities needlessly divides the region and reduces choice. Letting non-LA-County-Residents in the express lanes helps out locals in the general purpose lanes, and the best way for you to get more customers and more political will to increase the amount of managed lanes is to increase the number of people with FasTrak. Unite the Southland, drop the fee, and watch as residents from Bakersfield to San Bernardino sign up.

Finally, if a unified system is too grand, remember that express lanes is NOT about raising money, but rationing freeway space through market based solutions. Everyone is better off when throughput is maximized, and turning a profit should be incidental, not the goal. Don’t let staff’s incomplete analysis and lack of vision stand in the way of an integrated managed lane system and six million Southland transponders.

It just shows here that many people here who actually work in the corporate world actually knows more about corporate finance than the people who work at Metro.

This, is why I think, the back-and-forth cat-and-mouse games between local politicians and Metro doesn’t work. Sad to say, Metro employees are not the best and the brightest when it comes down to corporate financing and keeping budgets under control.

I think as taxpayers, we really need to start asking our elected officials to use third party independent analysts and consultants from Deloitte or PwC to do the reporting to find the real cost of these Metro projects instead of just believing the amount and rationalization that Metro says in their reports.
Besides, I’m sure Deloitte and PwC has offices here in Los Angeles and all over the world who contracts and have given financial advice to many transit agencies all over the world. In addition, many Deloitte and PwC employees live in transit oriented cities and commute to work using public transit. I’m sure if anyone can find Metro inefficiencies, they would be the best ones to hire.

Why don’t they just reduce the amount of times to 1. Like this people from other agencies won’t buy the Metro transponder and metro can still make sure that people will use it at least once a month. Maybe I’m wrong here but I’m almost certain that anyone who gets the transponder will use it at least once a month.

What about people living in San Diego? How about drivers from out of state? From Mexico? From Canada? Rental car owners who flew in from LAX or other LA area airports? How are you going to force a transponder for these people?

How do you enforce a situation like 70 year old grandma and grandpa who flew in from Seattle, renting a car at Hertz, punching in how to get to their grandkids’ place on their Garmin GPS device, and then ends up driving in the carpool lane which they don’t know it needs a transponder?

You just can’t. The fee has to go. There are just too many situations that make this minimum usage per month or else a $3 fee applies not worth the hassle.

Maybe I’m not completely understanding but, Isn’t that the point, why would people who are only going to be here for a week or so need a transponder.

This statement doesn’t make any sense either,
“How do you enforce a situation like 70 year old grandma and grandpa who flew in from Seattle, renting a car at Hertz, punching in how to get to their grandkids’ place on their Garmin GPS device, and then ends up driving in the carpool lane which they don’t know it needs a transponder?”

Whether the $3 fee is removed they will still be charged for driving on the Express Lane, although in that scenario I’m not sure who will be charged, either Hertz or the Grandparents.

The $3 fee isn’t for people who drive in on accident, its for infrequent users.

For people that are out of state wouldn’t that be the same issue as other FasTrak locations, I know in other states they have HOT/Toll lanes. As long as you enter the HOT lane correctly shouldn’t the sign inform the user that there is FasTrak, unless people are not understanding the FasTrak or cutting the line.

Yaroslavsky is absolutely right – we should at least waive fees for the first six months after implementation of the I-10 lanes, to gather data about how much of a free rider problem there is. If it is significant, then impose the fee, much like how San Diego did on the I-15 lanes. But there is likely to be more hassle for people who open and close accounts in order to avoid the fee, for example college students who take jobs elsewhere during the summer, or snowbirds. Is it cost effective for someone to close the account in May or June only to reopen it again in September or October? I don’t think so.

Let’s go back to the start here. The carpool lanes were built with public funds as carpools. Changing them into express lanes has taken a public facility and made it into a revenue generator. It needs to be understood that is the primary goal, not traffic abatement, along with conducting an experiment in social behavior to determine the amount people will pay to avoid congestion.
As part of the process to fund this transfer from the public access to fee-based, it was stated repeatedly by proponents that car pool access would be maintained and would be free. The imposition of a monthly fee reverses that promise, and as a result has created an incursion onto public access.
There are two ways to rectify this breach of promise: either waive the monthly fee, which is obviously no more than an auxiliary revenue generator (not withstanding the slippery calculations Metro has offered). Or simply waive the requirement for a transponder for carpools, which places enforcement back in its previous status of officer-enforced observation. That should be a no-brainer.
Metro needs to step away from this ill-advised action and restore the public’s access to the carpool lanes, as they were originally created and funded.

Here’s the difference between LACMTA’s implementation of the FasTrak vs all of the other agencies in the state:

All of the other toll agencies have cash lanes for everyone w/o transponders to use, (or carpools can travel for free in the case of the I-15 Express Lanes in San Diego, w/o a transponder.) With MetroExpress Lanes, carpools cannot get their monthly transponder fees waived unless they use it enough times with the cost of a transponder to get the monthly fee.

Thus the monthly fee will penalize anyone who occasionally has the rare second rider in their car. Not everyone who drives on the freeway is going to the workplace and thus Metro ExpressLanes only benefits those drivers who routinely travel with more than one person, on weekdays. For those who use the freeways to get around on the weekend or families who make occasional trips on freeways served by the two ExpressLanes projects, these groups of people will be adversely affected. These groups of people would think twice about getting a transponder, due to the monthly maintenance fee, given such discretionary trips.

I’m an unemployed, internship-less graduate student who has a FasTrak transponder issued from the only agency that does not charge a monthly maintenance fee. I specifically use that specific FasTrak transponder b/c I appreciate the freedom of using the transponder anywhere in the state (although I do not have the ability to select the number of occupants in my vehicle for Metro ExpressLanes use.) I drive to all corners of the state in hopes of finding a job (and have been unsuccessful in such efforts thus far.)

The cash fares for tolls are higher at most toll crossings w/o a transponder, which isn’t the case for Metro ExpressLanes.

I’ve been looking for a job for a good few years, but all I have been able to land in the past are temporary, budgeted positions without benefits.

I read the staff report. There are several key issues and alternatives they have conveniently overlooked.
1. The adverse impact on traffic with the current policy: Have you taken a look at the 110 on the weekends? The traffic is stop and go in the regular lanes, filled with high occupancy vehicles, while the express lanes are empty. Obviously, these travelers are not buying into the program, most likely because of the transponder cost and monthly fee. This is worsening traffic congestion and air quality. Moreover, it is adversely impacting quality of life in L.A.
2. Who is adversely affected by the current policy: Non-commuters, including seniors and others that live close to their work/school, are the ones that will be most likely to pay the monthly fee for their infrequent use of the express lanes. However, these are the people that should be rewarded for not clogging the freeways daily. Only government bureaucrats could see non-commuters as a drain on the freeway system that need to be charged. The staff report suggests that traffic congestion is not reduced by non-commuters. How illogical! People like my family chose to live near our work so we would not have to commute on the freeways daily. Instead, we just use them for occasional outings. Non-commuters should be rewarded, not punished, for not clogging the freeways daily.
As it stands, Metro has set up a very expensive program so that a few solo drivers who are willing to pay can use these lanes. Who wins? Who loses?

Alternatives Metro should consider:
1. Do not require transponders for carpoolers and motorcycles. If one only uses the express lanes as a carpool or motorcycle, there is no need for a transponder (and the associated fees of maintaining it).

2. Do not require fastrak transponders during non-peak hours. Virtually no one is using the express lanes late at night and on the weekends anyway. Just use the old carpool system during the off-peak hours.

The staff report states that Metro expects to net only $8-10 million annually from the Expresslanes; however, $7 million of that is the monthly fees paid by infrequent users of the system. In other words, without charging the infrequent users a monthly fee, Expresslanes won’t make any money. Therefore, the bulk of proceeds would come from drivers who infrequently use the Expresslanes. That makes no sense to me. Expresslanes created an incentive for solo drivers to use these lanes. The monthly fee should be born by the one using the system more, but who are not reducing traffic congestion or air pollution.
Also, Metro spent $250 million dollars create this program, but expects to net only $8-$10 million ($7million of such from infrequent users). Therein lies the problem. The system is seriously flawed.

I have to agree with the people above. I am not a regular commute. I only use the 110 carpool lanes when I’m going to LAX, which is only a few times a year. The monthly fee effectively means that regardless of how many people are in my car, I’m not allowed to use the carpool lane any more.

This is just plain wrong.

They point to other similar projects. But the San Diego express lanes only require transponders for single drivers. Carpools are allowed to use the lanes without a transponder. So that means that occasional users can use them as long as they have multiple occupants in the vehicle. This is clearly how the lanes here should be administered.

To avoid paying the fee, I’m just going to drive back and forth on the lane once a month. That will add to traffic and air pollution. Just another example of providing a service for the rich single driver. I though this was government for the people by the people.